The Next Big Push. MNRE Unveils Moves to Push Manufacturing

The Renewable energy sector, where private sector involvement has been considered critical to its growth and building further capacities, has got a new push, as far as manufacturing in India goes. This comes on the heels of the many efforts made last year to provide support for domestic manufacturing, fro the DCR (domestic content requirements) in specific PSU linked projects, to all subsidies being linked to domestically sourced components. Months into the Covid-19 epidemic and its impact globally, the MNRE sees a fresh opportunity in building up ‘energy security’for the country as well as fillip to domestic manufacturing.

The Ministry of New and Renewable Energy (MNRE) has formally announced its steps to give a fillip to make in India, when it comes to manufacturing equipment for the renewable energy sector. The focus is on setting up new hubs for manufacturing renewable energy equipments in the country to meet both domestic demand and exports. With this objective in view, the ministry had written to various State Governments and various Port Authorities to identify land parcels of 50-500 acres for setting up such Parks. Tuticorin Port Trust, States of Madhya Pradesh and Odisha have already expressed their keen  interest in setting up RE Manufacturing Parks.

Secretary, MNRE Shri Anand Kumar has already held meetings with RE manufacturing companies last week. Ministry has also got in touch with Trade Commissioners / Representatives of various countries inviting them to invest in this promising opportunity in India. Further Secretary, MNRE addressed the US India Strategic Partnership Forum earlier this week through Webinar and sought collaboration and investment by US Firms.

These facilities will manufacture equipments like silicon ingots & wafers, solar cells & modules, wind equipments and anciliary items like back sheet, glass, steel frames, inverters, batteries etc. The hubs will also export equipments and services in the RE sector. At present around 10 GW of Wind equipment manufacturing capacity exists in the country. In case of Solar Cells and Modules India imports about 85 % from abroad. The Government of India has already levied Basic Customs Duty for protecting solar manufacturing industry in India. It is a duty that looks set to continue for the foreseeable future.

The MNRE hopes to take advantage of the move by some firms to shift some manufacturing away from China. To ensure easier processing, the MNRE has already set up RE Industry Facilitation & Promotion Board under the Joint Secretary in the ministry to facilitate investment in the sector. This board is meant to be a sort of single window clearance and facilitation point for potential investors. The Ministry  has strengthened the clauses in Power Purchase Agreements (PPAs) to boost investor confidence. The three Power and RE Sector NBFCs namely PFC, REC and IREDA has reduced their repayment charges to 2% for enhancing the funds available for new projects in the sector. More over, IREDA has brought out a new Scheme for project specific funding to promote new RE projects in India.

Amendments to the Electricity Act (2003) are also on the cards through an ordinance of need be, to give teeth to many of the moves made by MNRE through formal notifications and orders.